Resource utilization is a measure of how efficiently a company’s resources (such as equipment, labor, and materials) are being used to produce goods or services. It is a key performance indicator (KPI) for operations teams and departments, as it can help identify areas where resources are being wasted, or where additional resources are needed.

There are several methods for measuring resource utilization, such as:

Utilization rate: This is a measure of how much of a resource is being used compared to the total amount available. For example, equipment utilization rate is the percentage of time that equipment is in use compared to the total amount of time it is available.

Capacity utilization: This is a measure of how much of a resource’s capacity is being used. For example, a factory’s capacity utilization is the percentage of its maximum production capacity that is being used.

Efficiency rate: This is a measure of how well a resource is being used. For example, labor efficiency is the ratio of the total output produced to the total labor hours used.

Measuring resource utilization can help a business identify areas where resources are being wasted, or where additional resources are needed. It can also help to identify bottlenecks in the production process and opportunities for process improvement.